UK firms ignoring ERP, statistics show

Research carried out for the first time ever by the UK’s Office for National Statistics found that only 6.5 per cent of 8,000 businesses surveyed were using ERP systems in 2006, a figure that rose to 37.2 per cent for the largest companies with more than 1,000 employees.

Weighted figures, adjusted to take account of the proportions of businesses of different sizes across the U.K., show that less than a third of all U.K. companies — 30.2 per cent — are estimated to be using ERP systems.

Gartner research director Chad Eschinger said the U.K.’s use of ERP systems was “lower than expected” but was likely to be “in line with other technology-mature countries and markets.” In the US, the largest penetration of ERP systems is in the top 2,000 businesses by size, “which we estimate to be closer to 95 per cent-plus penetration”, Eschinger said.

“As we move down in size of enterprise the revenue and penetration trails off significantly by the lower end of employee size. If I look at our research, which applies revenue by similar size of company bands worldwide there are similar percentages.”

The ONS survey found that customer relationship management software had been adopted by a higher percentage of firms, with 11.1 per cent of all those surveyed saying they used CRM to share information internally and 10.9 per cent using CRM systems to support external marketing work.

In larger firms with more than 1,000 employees, around 42 per cent were using CRM systems, while the weighted figures suggest that across all U.K. companies around 35 per cent have adopted CRM.

Unweighted figures show that small businesses with between 10 and 50 staff are making significantly more use of CRM systems, with 8.8 per cent using them to share information internally and 8.4 per cent for marketing, than ERP systems, where penetration is just 3.8 per cent.

The research shows significant use of free open source operating systems such as Linux among larger companies, with 29.4 per cent of firms employing more than 1,000 staff going down the open source route.

Among all the businesses surveyed, 6.3 per cent said they used open source, with the size-weighted figures suggesting that across all U.K. businesses more than one fifth — 22.6 per cent — are now using open source operating systems.

The ONS figures cover private sector firms. Ministers have recently admitted that the government does not know how much open source software it uses, despite a 2004 pledge to avoid “lock-in” to proprietary systems.

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